Bill backlog, job loss underscore need for government reform

An announcement during the week that the state is investing $26 million in the Integrated Bioprocessing Research Lab (IBRL) at the University of Illinois underscored the importance of pursuing projects that will make Illinois a destination for employers as a way to help the state grow its way out of the current budget mess.  Funding for the IBRL, which will help Illinois compete for up to 20,000 jobs in a new industry sector, was secured by the stopgap budget signed into law on June 30.

Job creation on this scale is critical, particularly when considering recent remarks made by Illinois Manufacturers’ Association President and CEO Greg Baise, who noted in a recent City Club of Chicago address that while many Midwestern states are adding manufacturing jobs, Illinois has lost more than 300,000 manufacturing jobs since the turn of the century.  Baise said that accounts for nearly one-fourth of Illinois’ manufacturing jobs since 2000, a figure that impacted nearly 200,000 Illinois residents.  Baise called for a reform agenda to create stability and predictability for Illinois’ employers—and employees. He underscored the importance of addressing the state’s pension debt and bill backlog; enacting workers’ compensation reform; tax reforms and incentives for employers; property tax relief; and an emphasis on creation of a skilled workforce through education and workforce development initiatives.

Republican lawmakers have also joined Gov. Bruce Rauner in calling for structural and spending reforms in state government, stressing that fundamental change is needed in Illinois to bring fiscal security and much-needed jobs back to the state.   This type of economic growth will be imperative to avoid what Moody’s Investors Services estimates could be an unpaid bill backlog of $14 billion by the summer of 2017.  A spokesman for Moody’s noted that “if the bill payment backlog becomes sufficiently large, the state could resort to borrowing from debt service funds for operating needs.”  That, he indicated, would further impact Illinois’ already dismal credit rating.

Though legislative Democrats have called for a reinstatement of their 2011 income tax hike as a way to boost revenues, Republican lawmakers and the Governor have resisted that effort. Republican lawmakers have refused to consider revenue enhancements without first passing economy-boosting, job-creating reforms.  Senate GOP lawmakers pointed out that though the Democrats’ previous tax increase brought in more than $30 billion, the state’s unpaid bills remained in the billions, the pension debt reached approximately $111 billion and the state’s financial situation remained unstable and unpredictable.  They said state spending that exceeded existing revenues has led to the state’s fiscal instability and bill backlog, and have staunchly refused to support efforts to hike taxes without first exploring ways to make government more efficient, reduce waste, boost the economy and help Illinois’ employers.

Chapin Rose

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